How much is your train subsidised?

[whole diary]

[Chris from Nailsea]

From the BBC^» (British Broadcasting Corporation - home page):

Every time you travelled a mile on a train last year, the government effectively gave the train company an average of 7.5 pence.

Or put it another way, assuming you are a taxpayer, you subsidised your own journey by an average of 7.5p per mile.

That's on top of buying the ticket of course.

In fact, just one train operating company wasn't subsidised overall last year, according to the latest figures from the Department for Transport, and that was First Capital Connect, which runs trains from London, Brighton, Bedford, Peterborough, Cambridge and King's Lynn.

At the other end of the scale, Northern Rail got nearly 35p back for every passenger mile travelled on their trains (this figures does not include Scotrail and Arriva Trains Wales that are subsidised separately by the Scottish Parliament and Welsh Assembly).

Here's the link if you want to see how your train firm got on.

Just like everything else on Britain's railways - ticketing, franchising, finding somewhere to park your bike, these figures are complicated. They include the subsidy paid directly to Network Rail so that they, in turn, can charge the train companies less money to use the track.

But what you end up with is straightforward. Every train firm bar one was helped out by the taxpayer.

The bigger picture here is this - despite the fact that the railways were privatised nearly two decades ago, the industry is still propped up by bundles of public money.

Ministers handed over nearly ^4bn last year. Successive governments have been working hard to get that figure down, mainly by charging more for tickets, hence the endless, above-inflation fare increases. But it is still more than 40% of the total cost of running the network.

All four rail unions (ASLEF^» (Associated Society of Locomotive Engineers and Firemen - about), RMT^▸ (National Union of Rail, Maritime & Transport Workers), TSSA^» (Transport Salaried Staffs' Association - about) and Unite) together with the TUC are highlighting these figures as part of their ongoing "Action for Rail" campaign. They argue that the figures prove the franchising system is bust, because it just means public money that could be used to improve services, ends up in the pockets of train company shareholders.

They've worked out that train firms gave ^1.17bn in premiums to the government last year, and got ^3.88bn back in subsidies. Expect to see protests at many stations across Britain on Friday.

Franchising - giving private companies contracts to run train services - is clearly under a lot of pressure since the government messed up its sums on the West Coast deal. The unions are trying to capitalise on the chaos, to try to get the railways back where they want them, fully in public hands.

[Bristolboy]

Interesting fgw requires one of the lowest subsidy, despite running trains in far south west/into Wales which are often relatively empty compared with some other companies who seem to be busy all across the the network (although I appreciate many of the fgw trains are extremely busy!).

[Tim]

Given that ticket prices and the number of passengers have increased year on year, don't you have to be runnign a pretty poor show for average subsidy to from one year to the next increase?

[grahame]

Given that ticket prices and the number of passengers have increased year on year, don't you have to be runnign a pretty poor show for average subsidy to from one year to the next increase?

You would think so, yes, but there are some strange consequences of the fare system on some lines.

There was a "classic" example of this with the Summer Sunday trains, summer 2011, Swindon to Weymouth.  The trains were formed of more carriages than had been planned after the initial weeks, and were still packed and with people standing most of the way.  And in both directions, so there was relatively little low load / empty running.   More full carriages = positive financial situation?  Not quite!

A family of 4 adults and 4 children could buy a groupsave day return from Swindon to Weymouth for 35 pounds.  The distance is 90 miles, so that works out at 1440 passenger miles at 2.43p per mile.  To some extent it depends on how you do the accounting, of course, but that income's not exactly going to pay for the train hire, maintenance and running costs.   9 groups of 8 = 72 people -> all seats taken. That's 315 pounds of income.   And that's about the cost of hire for the day.   Make the train longer and you loose more ...

Clever thing to do is to (in this case) is to extend the season so it's not just high summer, to make sure that it's not just Sundays that the trip can be done (both of these level out loading) and to increase the average income per seat from the 2.43p per mile I've quoted.